Demand management UNIT 4

Demand management UNIT 4

1. Design and interpretation of forecasts

   • They are used to detect future situations and make projections based on the information analyzed.
     • In logistics, he is in charge of the stock and sales sector to anticipate what will be needed in the supply chain.
       • Its most important functions are: -Reduce the bottleneck. -Optimize operations. -Reduce waste costs.
         • The demand forecast is the estimate of those products that are going to be sold in a certain period of time.
           • Example, sales at Christmas, Valentine's Day, Easter, etc.

2. Demand Planning

   • It is a strategy focused on solving a problem, managing material and information flows based on internal and external business processes, in order to to respond profitably to market demand.
     • There are two types of demand
       • Dependent demand: includes the materials or intermediate products we need to produce the amount of final product being demanded.
       • Independent demand :Products or goods that do not depend on another good to be sold (they are not sub-parts or sub-assemblies) have independent demand
       • Companies currently have systems in place to keep track of demand
         • MRP, Backorder, Safety Stock, Lead Time, Bill of Materials (BOM).
           • MRP 1.Define the materials. 2. Prepare the Master Production Plan. 3.Inventory register. 4.Software. 5. Indicate gross requirements. 6. Indicate the receipt of materials. 7. Calculate inventory on hand. 8. Receipt of raw materials. 9. Production launching

3. Demand Forecast

   • Demand forecasting is a projection of future sales in order to plan production levels, costs, expenses, profit, and associated logistics,
     • Its objective is to have better control and coordination to meet such demand; This forecast can be done through two approaches, a qualitative approach and a quantitative approach.
       • it's divided in:
         • Quialitative
           • Are based on subjective feedback, assumptions and opinions of experts and personalities in the industry in question.
             • In this sense, such analysis is similar to the analysis of statistical data.
         • Quantitative
           • These forecasts use mathematical models to analyze a company's past sales performance. These models assume that historical data are relevant in the future.
             • It is formed from a deductive approach in which emphasis is placed on the verification of the theory, shaped by empiricist and positivist philosophies.